Question

1a)Identify, discuss and analyze one or more strategic business units (divisions) of any company that you choose. 1b)Are these divisions Stars, Cash Cows, Problem Childs or dogs? Provide a rationale for your answer

Answer 1

The company that would be discussed further is Walt Disney. The strategic business units (divisions) of the company are Disney Interactive and studio entertainment.

Disney Interactive Sudios, Inc was an American game developer owned and published by Walt Disney. It developed and distributed multi-platform video games. It also developed much interactive entertainment that was successful worldwide. In 2016, Disney Infinity was discontinued following the exit of Disney Interactive. The company said that they want to focus on third-party development of home console video games that are developed by experienced and successful developers such as Electronic Arts, Warner Bros., Capcom, etc. The company wanted to understand the market preferences and said that they need to focus on their main revenue generating units such as media networks, theme parks, studio entertainment and its cable network for Netflix. This SBU comes under the ‘Dogs’ category because there is low market growth and have low market share. In comparison to other third party developers, Walt Disney has very low market share. Hence, they decided to close DI.

Studio entertainment, on the other hand comes under ‘Cash Cows’ category because the business has high market share however they have low growth rate as the SBU has reached its maturity stage. Though this SBU has reached a maturity stage, it is a high generating income for Walt Disney. Walt Disney Studios primarily includes Walt Disney Pictures, Pixar, Lucasfilm, etc. Disney’s entertainment studio has been from the time of inception of the company and distributes and markets films in three major markets such as theatrical division, television segment and home entertainment segment. About 27% of the revenue comes from studio entertainment for Walt Disney though they have low growth rate.

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